New Era is a throwback. The family-owned company has bucked the trend of fast-growing businesses seeking riches or fresh capital through an IPO, instead remaining in the hands of the founder’s son and current CEO, Chris Koch. “My father was my mentor, and he hated debt and partners,” Koch, only half joking, said yesterday at the '17 CAA World Congress of Sports. “He drilled into me we’re a family company and you can do something amazing if you can stay private and not have public partners.” Koch credits his father for building the business by outfitting MLB clubs in the depression-era, starting with the Indians in '34. That was the company’s first chapter. Koch said the next chapter, growing revenue tenfold through global expansion and broadening the product line, began with a single phone call. Koch: “When Spike Lee called me out of the blue in 1996 and asked me to make him a red Yankee cap, I said, ‘Why would you want a red Yankee cap?’ He said, ‘I’m going to wear it at the World Series with a red Yankee jacket.’” When Lee wore that red cap, it took the brand in a whole new direction. “Before that, it was fans who bought the product,” said Koch. “After that, small boutiques called and said, ‘Can I get the red cap?’ And then it went to bigger accounts. Champs. Lids. Companies like that.”
THE SAME, BUT DIFFERENT: Koch said another secret to success is the ability to create “mass customization,” where every retail partner looks different even if they stock the same merchandise. Going global has also opened up new markets. “In the early 2000s, MLB had asked us to move into Europe and Asia,” he said. "When we did that, I think our international business was basically Canada and was 2% of our business. Half the business we do outside this country is apparel, backpacks and luggage, things we don’t do in this country. Outside the U.S., it’s a lifestyle fashion play, the fan market isn’t anywhere near as big as it is in US.” Koch said the company is bringing the lifestyle lines to the U.S.
NATURAL FIT: Koch said it is “pretty damn cool to see” New Era’s name on the stadium of the company’s hometown Bills. “Terry (Pegula) said, ‘I don’t need the money, but I think this deal makes a lot of sense,’ said Koch. “And we came to see that. The way we’ve done the deal … you see fans taking their pics and doing selfies in front of the stuff we’ve done on the outside of the stadium. It’s not a normal naming-rights deal.”
Quick Hits:
* How would his father feel about today’s New Era? “We did less than $100 million in rev when he died (15 years ago). This year we’re approaching $1 billion in revenue. He’d be proud the way we’ve grown into an international brand."
* What keeps you up at night? “The things that keep me up at night are the crazy events going on around the world. Something could happen that could affect our business in a very negative way. There are so many positive things going on right now that I worry some big disaster could happen, like a terrorist act. It could change the momentum of what’s happening in our industry right now. This is the most exciting time of my life and I’ve been in the industry for 40 years.”
